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Date Night? You May Have to Withhold Babysitter Taxes

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taxesI thought I’d liven up your Sunday a little bit with some tax stuff! You can thank me in the comments. I’ve just recently put my daughter in daycare for the first time — but before I did, I was considering a nanny. I sent a few of my questions to a friend who had employed nannies for years. She seemed like the type who really had her shit together, so when she replied to my tax questions with a kind of dismissive, oh, I don’t do anything with those, I was kind of surprised. As it turns out, according to today’s NYTimes Motherlode blog post by Jacoba Urist, this attitude is actually pretty common. But Urist has a hard truth for parents who hire in-home help: you may be legally required to withhold babysitter taxes for even occasional employees.

According to the I.R.S.’s Household Employer’s Tax Guide (or Publication 926) for 2013, any family that paid a household employee $1,800 in cash wages over the year is required to withhold Social Security and Medicare, and to match that withholding with an employer contribution. Additional unemployment and state taxes may also be due.

I try really really hard to follow all the rules. The tax rules, the golden rule, the rules of grammar (except in this sentence). So it’s a little unsettling to see that $1,800 is all it takes for someone to be considered a household employee. This is important information for me, considering this is the year my husband and I have regularly started employing sitters for date nights, volleyball nights, and when we have to work on the weekends.

Urist notes that “it’s most important to remember that withholding rules are designed to protect your nanny, by financing her Social Security and Medicare down the road — just as she tries to anticipate your child’s needs each and every day.”

But this is why it’s tricky for people like me, who hire friends for sitters, friends who aren’t watching our child as their form of primary employment. Our date night sitters have their taxes withheld by their day jobs as hostesses or cooks or servers (apparently all of our friends work in the restaurant industry). It seems unnecessary for me to play that role, too. Not to mention I’m a freelance writer, not an executive with enough money to pay both my sitters’ taxes and the wage they deserve.

But I don’t know. I don’t want the IRS coming after me, either. Happy Sunday!

(photo: Andrey_Popov/Shutterstock)

15 Comments

  1. jef3r

    April 14, 2013 at 3:58 pm

    I thought this was common knowledge. A nanny is an employee and most certainly pays taxes on the money you pay her. Being your child’s nanny is her job. A random teenager used on a Saturday night? Not as big of a deal. You’d hardly pay one teenager enough over the year to count as income for him/her to have to report it…unless you go out a LOT and always use the same babysitter.

  2. Blueathena623

    April 14, 2013 at 8:14 pm

    A nanny, yes. A sitter? I thought the 1800 seemed too high to even have to consider it for a sitter, but if you used 1 sitter 3.5 hours a week, every week, there’s your 1800. I’m going by a rate of 10 bucks an hour because thats what I got paid back in the 90s.

    • Sara

      April 14, 2013 at 11:39 pm

      Wow, you were a well-paid babysitter! I was paid two or three bucks an hour for babysitting back in the early 90s!

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